What must an insurance company do if they decide not to renew a policy?

When an insurance company decides not to renew a policy, it is required to notify the policyholder of the non-renewal in advance. This requirement serves several important purposes. First, it ensures that the policyholder is informed about the status of their coverage, allowing them to make necessary arrangements to secure alternative coverage before their current policy expires. This advance notification helps them avoid any potential gaps in insurance coverage, which could leave them vulnerable to risks.

Additionally, notifying the policyholder in advance is often regulated by state laws, which mandate the timeframe and method of this communication. This legal framework is in place to protect consumers and ensure transparency in the insurance process. Overall, this requirement promotes responsible practices within the insurance industry and safeguards the interests of policyholders.